Transcripts For CSPAN2 After Words After Words Joe Ricketts

CSPAN2 After Words After Words Joe Ricketts The Harder You Work The Luckier... July 13, 2024

Authors about their latest work. All after words programs are also available as podcasts. Host show, thank you for being with us here today. It is a heck of a book. Really enjoyed it. It is a gripping story and well told. I guess my first question is why did you decide to write this now, is it restless joe ricketts syndrome or was there something thathat you moore wanted to sayt this point, what motivated you to want to do this now . Guest i tell you now it was written to appeal to entrepreneurs to let them know how hard it can be and how rewarding it can be so that it offers an encouragement to people to think if i want to start my own business, i should do it. The other thing i wanted to do before i got too old and dont remember everything is because looking at this chain should from when the fcc dictated the New York Stock Exchange to get rid of the fixed commissions. It was a reflection point in the Financial Service industry and i wanted to tell the story from the inside so people would see the human aspect of it. So the title, the harder you work the luckier you get, is that tongueincheek or do you believe that . Guest it happened to me so many times i think sam is the first one that kind of put that phrase together, but as i was talking to the people at Simon Schuster i wouldve told them here is a problem and of course it isnt about time and time again the harder you work the luckier you get. It came out and sounded like it should be a good title. Host there was an amazing amount of artwork that you went through. In the financial industry that worked for close to 20 years, myself the story you tell about building ameritrade and how hard it was is truly gripping. And ive written books about the history of bear stearns and Goldman Sachs and i never got the impression that in writing those histories of course i didnt live through it that it was tough as you experienced involving ameritrade, how did you do that . Guest one of the things that made it tough is lack of capital. Back in the 70s we had to set up a Financial Statement every six months to the customers and one of our customers called me and said i thought i had to tell you you left three zeros off of your net worth and i said no, those are the figures that are seeing their. So, we could only grow by the capital that we left in the business from our profit. We also have to be careful about running a business so that in the regulations of tracking the net capital and to stay within those regulations, so it was a constant struggle of balancing and then how much can i put in advertising and how much do i need to make sure the increase in the business is not going to exceed our net capital and how much can i put into hiring new employees and buy a new record for them to use. That was a difficult balance for many, many years. That is what really allow allows to grow as well as we did, but even after being in business almost 20 years when i saw the opportunity i simply dont have enough cash or money and we are not going to make it. We are going to have to go public so that was at the time that i said if we are going to stay in this industry and be one of the winners we are going to have to have more capital and that prompted us to go public. Host that is the decision from any companys lifespan. You spoke about the momentous big bang and commissions went okay and what that meant for your business. In my own writing and research and experience on wall street, one of the most important moments in history of wall street is when firms started going public and they went from being Public Private partnerships to the company is an obviously need access to capital a lot easier. It sounds like you had regrets going public that you have to do it for the Capital Access some of the same thing can be said about Goldman Sachs. Was something lost and you went public in your mind and how important do you think this idea is for the way to change the culture and wall street . Guest for me it was a difficult position because i always wanted to leave a business for my family to update after i could retire and i knew that it would be difficult to maintain the atmosphere of the Family Business. But the same time i also knew that we needed access to that of capital in order to take advantage of opportunities ahead of us and that turned out to be right. I kind of figured we need 100 million for technology and 100 million for advertising. Both of them turned out to be low so we went public at the right time to get the right amount of capital for the lack of a better term for the Upper Echelon of the people that were going to be able to stay in time. At the time we had over 400 competitors but most of the people were out before the late 1990s. A very similar story to the Automobile Industry or any other kind of industry and i was aware of that. I knew that if we wanted to stay small, we were not going to be able to survive and i wouldnt have anything to leave to my children. At the time we went public in the cu gut that blessings to compete i knew he wouldnt havee the same intimate atmosphere about looking at ameritrade it was kind of a very fun environment even though it was very stressful and people had to work hard. Everybody seemed to enjoy it. When you go public, you really kind of become a different company. You become for the lack of a better term or professional and thats touched that you feel when you are in a private company. I have a different attitude towards the Investment Bankers. They had better management of what they were doing as investment so i thought dealing with the public in the retail buying and selling and being an investment banker is two different businesses that need to be kind of thought of separately. On the public side it was when you are dealing with customers that was okay. We really did well by going public. Public. It was us personally as a family that lost. I certainly agree with you on balance into the idea that the Investment Bankers in the state privates, however of course you know they were getting to so many other businesses, so obviously Morgan Stanley had a big brokerage surveyor were so many different businesses maybe it was inevitable and the Capital Requirements were not that much different than the retail brokerage. Did you feel that the underwriterunderwriters that tau public did a good job with that and was a process for you or did that leave something to be desired . It left something to be desired. I was amazed we have been in this for 20 years. We were going to have a small offering until he got to boston and then they didnt understand the business and they were not enthusiastic about us taking it public. They did it because it made us money. Its what kind of growth we could have and they said why dont you tell us. You wouldnt listen, you wouldnt buy into it. We had been growing at a phenomenal rate and nobody in the securities industry thought we were going to be anything other than a startup business. That was all a surprise and a shock to me. If it is quite all right. A lot of people were close neighbors. If we were located in one of the money centers, i think that we probably would have been looked at the same way because the securities industry didnt want to think that we were competitors and didnt want to think that we were doing as well as we were so they subconsciously ignored us. That is true but what warren buffet does is so much different than what we do. I dont know that phenomena would wear off on us. I had a couple business meetings with him over the period of about 30 years and maybe i will see him once a year or so at a fundraiser or something of that sort but he is in a completely different world than i am. That is certainly correct. Host your childhood is so interesting and growing up it is interesting and you had a very different outlook rather than your family and parents. The typical things kids growing up were interested in. Guest it was not hard. Being in Nebraska City in the 40s and 50s and 60s were some absolutely wonderful place for people to grow up and we still look back at that and say in the most wonderful way w we didnt realize it, we didnt know it. With respect to my father, he was in business with his father and when my grandfather died a. He encouraged me to get into Engineering School that i had no intention of going into that business. Ive tried as a young person but you have to have some talent with your hands and i dont have that talent with my hands. I couldnt conceive of the mechanics. You have to understand how you should. The second part is i couldnt wait to get out of Nebraska City even though it is a wonderful place to grow up. Although my father would have enjoyed becoming antibusiness. And he fired me he said you are just not going to make it as a good carpenter. So, even though you would normally think that that would be a stressful time am if he was comfortable asking me to leave the company and i was comfortable saying im happy youre asking me to leave. I dont want to disappoint you and im pleased that you are not so disappointed. Some of the other aspects that playing sports, i never had a shortcoming in myself when i played sports. I tried to play sports, but i was old phones. It didnt work. I would take my few dollars and go to the bank and go to a teller a that really made me feel grown up and that was a feeling that i got this nothing else would replace. So, working to make a few dollars if is probably the most important thing in my life as a young man. My parents always an urged me to work and saved. They never encouraged me to play sports. So, i always had of course my parents were raised during the depression. The amount of times that you have a different attitude. You talked about how growing up in that freedom and responsibility. That feels like such an american concept to me and an admirer of all american concept i didnt want to disappoint her and do things she would consider to be something that would make her feel embarrassed. We always did understand we had a certain place in the community and we needed to work to maintain that place. Even though i had no idea what was happening to me at the time as i look back now, i can see that i always knew i should be responsible, but i also knew i had the freedom to go anywhere and do anything. Can you tell the story of the family it seems to be a seminal moment. Guest it was a great lesson for me to learn when i was a young man or boy. My grandfather was a successful farmer in mandalay nebraska. Its a small farming town. Being a successful person in that community meant that the rules that you the roads you plow horse trader, things of that sort and the other thing of course is the Catholic Church in that small town offered the first few to the family that gave the most part the second fugitive family that did the secondmost in things of that sort and my grandfather always had a different view. You lend your money and take your risk and put an Interest Rate that you thought it would be something that would give you the adequate reward relative to the rescue were taking. It took a dip after good supply on the market. During the 1920s, times were good. As soon as they had some equity they borrowed against that. So they had some equity again and they built the inverse pyramid and if everything would have continued the same it would have been just wonderful but of course it didnt. We went into the depression. One of the things my grandfather did is feed cattle. His dream was to have on the side but before they got very old, he thought baseball and it had a disease. I get fro can prevent it, tubers or hoof and mouth disease. It was a very prized bull and when he brought it home he had a party. It was like a tear in his barnyard and invite him in and there was a number of tables taken from the house to put in the yard and everybody got some food so the tables were full of food and people would play games that they could make up. One of the games my aunt told me was the then what that on how many eggs they could lay on the back before they start to fall off. My grandfather was in his heyday. This was the peak of his career because he was able to show off the ball and think about the benefits that he could have two maktweaked the herd gets biggerd better as far as the type of meat they would produce. When he got the decision from the state that his animal had this disease, he lost all control than the state took control and it was before current science knew how to handle it so the whole herd had to be destroyed and of course he didnt have the money they make the money to make a payment on the loan and was like pulling the fulcrum of the universe. And everybody lost their farm. This was also before the days of any kind of social welfare. When he lost the farm, he moved to Nebraska City to go to work in the packing house but he had a nervous breakdowns we never did work after he lost the farm and my memories of him are sitting in a rocking chair just looking out the window. His sons were old enough to work in the packing houses and his daughters went to work so the whole family went to work to support the family but here is this man that had a very Strong Social position while he was a good farmer and had to move into a house in Nebraska City. They rented at the least expensive thing they could find, didnt even have any floors, it had floors like a log cabin so very much of a come down in hard times for the family. Like i said, he never did recover. It had a big influence on my mother and she told me that story many times. Times. Host did you take a lesson from that story . I did. I always had to say to myself be ready to fail. Be ready to lose all of your dreams and start over. And in fact, ive got a website and one of the entrepreneurs on the website that i interview says entrepreneurs are different. The fail and when we do, we get back on the horse. As an entrepreneur youve got to understand out of the ten businesses that fail your risk is quite high but if that happens and you are really an entrepreneur you get back and try again. Host another important moment if i get this right your fathers business and what that told you about the importance of innovation and technology. Host it is an important part of the story, an and i reay started out there and pointed out how important it was because after we were so successful with technology around the turn of the century and we were big and successful, everybody thought i understood technology and that understanding is allowe waswasa. The reality is i didnt understand, i just understood what it could do and that image is where my mind went after i got the idea. These people dont know i dont know about technology and my mind went right back to that afternoon in the yard when my dad first used a bus buzz saw and he was impressed by how much more they could do. Host is this the idea you dont have to know how a car engine works you just have to know what a car can do for you . Guest thats correct. Same thing. Host it seemed again from reading the Book Technology was always a hurdle you were trying to get over and it would be obsolete by the time you implemented it and a lot of money was spent and a lot of people cycle through trying to figure out the technology and it is as simple as the innovation of having people be able to dial a phone number to make their trade to do that sort of automatically. It seemed like every time you thought you had the edge on the technology is let you down and you were behind the ball all over again. Guest it is amazing to me to think where we started with a touch tone telephone and a pencil and a piece of paper for an order sheet. When we had a trade may be recorded in the book and then we put it on a ledger sheet that went into an alphabetic system so as i said in the bucket is just right out of Charles Dickens days everything was done by hand and it didnt take long to learn we couldnt continue to do everything by hand and expect business to grow and of course we all wanted to grow and saul that opportunity so we had to have some sort of automation come in to help us out and as i describe in the First Company that we used was accompanied by the name of Computer Research and they gave us a machine that was like a big typewriter where the clerk would type in the activity for today, the trades, the money received, the checks going out, that sort of thing. And then prepared a tape and he would then send our telephone into a holder and the tape was hooked up and it would give the beeps and information to the computer and philadelphia. So we are in omaha and all of this goes to philadelphia. If you have some static on the line, the information was incorrect. So the company in philadelphia would receive the information that we send, process it and print it out in chicago so all of the ledger sheets and confirmations, all of the statements would be printed in chicago. In chicago the person that ran the machines that put them in a box and send them to us in omaha so all of that was to happen overnight. Very seldom did it happen seldon overnight something always happened. There was a snowstorm or somethinsomething preventativess usually a day after we were supposed to get it than we had to go through and pick up all the mistakes. It was a much more efficient way to operate but it was never solved Service Opportunity pharmacy and in some ways it was very inefficient because we were ready to do the business of the day which is answer the telephone and write the ticket and not spend time going through the business we did two days ago and immigrant fears. So it wasnt too long after we had that business and ive got to tell you im very happy we added. It was a good stepping stone that we realized we needed to have our own system. But i had never heard the word software so when people said youve got to have a computer and software the first question was what is software. Back in 1975 it is hard for people to realize it wasnt all that long ago that these things really came being and the world was completely different at that time than it is today. Im sorry, go ahead. In the book i talk about dave kellogg who was the genius that all of the software together, but if anybody thought that you are going to b

© 2025 Vimarsana